Lockheed Martin Corp (LMT) shares took a hit on Tuesday after the defense giant reported mixed third-quarter results, sending its stock down by 4.91%. While the company surpassed earnings expectations, revenue fell short of analysts’ estimates.
Despite the revenue miss, Lockheed Martin remains optimistic about its future prospects. The company raised its full-year 2024 outlook, citing strong year-to-date performance and confidence in its ability to meet upcoming goals.
Here’s a breakdown of the key takeaways from Lockheed Martin’s third-quarter earnings report:
*
Revenue:
Lockheed Martin reported net sales growth of 1.3% year-over-year, reaching $17.104 billion. This missed the consensus estimate of $17.351 billion.*
Earnings:
The company’s adjusted earnings per share (EPS) came in at $6.84, surpassing the consensus estimate of $6.50. This represents an increase from $6.77 in the prior year.*
Margins:
Lockheed Martin’s gross margin expanded by 24 basis points (bps) to 12.4%. Operating profit reached $2.14 billion, and the operating margin improved by 41 bps to 12.5%.*
Segment Performance:
*
Aeronautics:
Sales declined by 3% year-over-year to $6.487 billion. The operating margin was 10.2%, up from 10% in the previous year.*
Missiles and Fire Control:
Sales rose by 8% year-over-year to $3.175 billion. The operating margin increased to 14.4% from 13.5% in the prior year.*
Rotary and Mission Systems:
Sales grew by 6% year-over-year to $4.367 billion. The operating margin dipped by 60 bps to 11.1%.*
Space:
Net sales fell by 1% year-over-year to $3.075 billion. The operating margin expanded by 40 bps to 8.8%.*
Cash Flow:
Lockheed Martin generated operating cash flow of $5.949 billion for the nine months ended September 30, 2024, compared to $5.555 billion in the same period last year.*
Backlog:
At the end of the quarter, Lockheed Martin’s total backlog stood at $165.693 billion, a 3.1% increase from December 31, 2023.*
Shareholder Returns:
The company returned $1.6 billion to shareholders through dividends and share repurchases during the quarter.*
Dividend:
Lockheed Martin declared a fourth-quarter dividend payment of $3.30 per share, representing a $0.15 increase from the prior quarterly dividend payment.*
Share Repurchase Authorization:
The company’s board authorized the repurchase of up to an additional $3.0 billion of its common stock, raising the total authorization for potential future common stock repurchases to $10.3 billion.*
FY24 Outlook:
Lockheed Martin narrowed its sales guidance from the $70.50 billion – $71.50 billion range to approximately $71.25 billion. This revised forecast is slightly higher than the consensus estimate of $71.05 billion. The company also raised its EPS guidance to approximately $26.65 from $26.10 – $26.60, compared to the consensus estimate of $26.38.Lockheed Martin CEO Jim Taiclet expressed confidence in the company’s future, highlighting its progress on key initiatives within its 21st Century Security strategy. These initiatives include strengthening production capabilities, accelerating technological advancements, and expanding international partnerships.
Despite the short-term market reaction, Lockheed Martin’s strong performance and positive outlook suggest that the company remains well-positioned to navigate the evolving defense landscape.